Alamos Gold Q1 Earnings Call Highlights

Key Points

• Production & costs: Alamos produced 124,000 ounces of gold in Q1 and expects Q2 production to rise ~20% as Island Gold ramps and Young‑Davidson recovers, while Q1 AISC was $1,862/oz and is forecast to fall ~5% in Q2 with larger improvements in H2.
• Record financials and capital position: The company sold 122,000 oz at an average realized price of $4,829/oz, generating record revenue of $597 million, operating cash flow of $338 million and free cash flow of $102 million, leaving $660 million cash and about $1.2 billion in available liquidity; management raised the dividend 60% and spent $43 million to buy out 15,000 oz of legacy hedges (245,000 of 330,000 oz eliminated).
• Island Gold expansion and long‑term outlook: Shaft sinking to 1,381 m is complete and commissioning is on track for early 2027, while a larger expansion study targets average production of 534,000 oz/year from 2028 at an AISC of $1,025/oz, with projected >$1 billion annual free cash flow at $4,500/oz.

Alamos Gold NYSE: AGI reported first-quarter 2026 gold production of 124,000 ounces, which management said was in line with quarterly guidance as stronger performance from the Island Gold District offset lower-than-planned production at the Young-Davidson mine. During the company’s earnings call, executives also pointed to record revenue and cash flow, progress on major growth projects, and expectations for higher production and lower costs later in the year.

Production and cost outlook

President and CEO John McCluskey said the Island Gold District posted a “solid overall quarter” as work advanced on the shaft and larger mill expansion, underground mining rates increased to a new record, and Magino’s milling rates improved “over the past six weeks.” He said the company expects the continued ramp-up at Island Gold, along with improved mining rates and grades at Young-Davidson, to lift second-quarter production by approximately 20%.

McCluskey added that costs were expected to be elevated in the first quarter relative to first-half guidance. All-in sustaining costs (AISC) were $1,862 per ounce in Q1, and he said they are expected to decrease by about 5% in Q2, with “a more significant improvement” anticipated in the second half due to higher low-cost production from the Island Gold District.

Chief Financial Officer Greg Fisher said the company continues to monitor inflationary pressures, including higher labor, contractor, diesel, and electricity costs. In response to an analyst question, Fisher said the company’s forecast for the Q2 cost improvement assumes spot prices as of March 31, and “the higher rates that we’re seeing now is what we’ve assumed when we talked about that 5% reduction in cost.” He also described diesel as “about 5%” of the company’s cost structure, noting that in Mexico it is regulated and that “about 20% of our diesel has been hedged at much lower rates than what we’re seeing right now.” On labor, he said the larger pressure has been on contractor labor, but described it as manageable and “built into our budget.”

Record revenue, margins, and free cash flow

Fisher said Alamos sold 122,000 ounces of gold in Q1 at an average realized price of $4,829 per ounce, driving record quarterly revenues of $597 million. Total cash costs were $1,230 per ounce, and AISC were $1,862 per ounce.

Operating cash flow before changes in non-cash working capital rose to a record $338 million, or $0.80 per share, Fisher said. That figure included a $43 million reduction related to cash used to buy out 15,000 ounces of legacy Argonaut Gold hedges prior to maturity. Reported net earnings were $191 million, or $0.46 per share, which Fisher said included after-tax losses on commodity hedge derivatives of $20 million and unrealized foreign exchange losses of $19 million. Excluding those items, adjusted net earnings were $232 million, or $0.55 per share.

Capital spending totaled $184 million, including $45 million of sustaining capital, $127 million of growth capital, and $11 million of capitalized exploration. Fisher said the company generated $102 million of free cash flow in the quarter, net of $82 million in cash taxes paid.

Island Gold District: throughput gains and expansion progress

Chief Operating Officer Luc Guimond said the Island Gold District produced 61,200 ounces in Q1. Underground mining rates averaged a record 1,423 tons per day, a 23% increase from Q4, and mined grades of 9.4 grams per tonne were consistent with guidance. Guimond said the company expects underground mining rates to ramp gradually to 2,000 tons per day by the end of 2026, with higher grades in the second half supporting increasing production through the remainder of 2026.

Total milling rates across the district averaged nearly 8,800 tons per day, with the Magino mill averaging 7,500 tons per day and the Island Gold mill averaging 1,260 tons per day. Guimond said Magino’s milling rates are expected to rise in Q2 and through the second half as a result of improvements to the crushing circuit.

Guimond said a temporary crusher was added to the Magino mill in late February to supplement crushed ore feed, contributing to milling rates averaging 9,200 tons per day over the past six weeks. He said milling rates are expected to remain around those levels in Q2, with liner changes and conveyor replacements scheduled, and that the operation is expected to reach steady-state milling rates of 10,000 tons per day by Q3. Combined with the Island Gold mill, the district is expected to process more than 11,000 tons per day in the second half and into 2027.

On longer-term initiatives, Guimond said connecting Magino to grid power will provide more reliable power at “substantially lower costs into 2027.” In response to a question about the magnitude of savings, he said it equates to about “$5 a ton.”

Guimond also provided an update on the Phase III+ shaft expansion. He said shaft sinking to the planned depth of 1,381 meters was completed in Q1 and that paste plant construction remains on track for completion in Q2. Commissioning of the shaft and surface infrastructure is expected by early 2027. In the Q&A, Guimond said remaining key items include furnishing the shaft with structural steel and completing ore and waste handling infrastructure to feed the shaft, with commissioning targeted for early Q1 2027.

McCluskey also highlighted the larger Island Gold District expansion study released during the quarter, which he said outlines a “large, long-life, low-cost operation.” He said that at a $4,500 per ounce gold price, the district is expected to generate more than $1 billion in annual free cash flow and has a $12 billion after-tax net present value (NPV). Guimond said the larger expansion remains on track for completion in early 2028 and is expected to lift production to an average of 534,000 ounces per year starting in 2028, at AISC of $1,025 per ounce.

Young-Davidson, Mulatos, PDA, and exploration updates

At Young-Davidson, Guimond said Q1 production was 30,000 ounces, below plan, primarily due to lower mining and milling rates. Milling averaged 6,800 tons per day due to longer scheduled maintenance downtime and an unscheduled transformer repair, he said. Underground mining rates were also 5% below plan because of ore pass rehabilitation work and commissioning delays, which increased rehandling and reduced productivity.

Guimond said that with two passes now fully operational, active ore passes have increased to four, which is expected to support mining and milling rates of about 8,000 tons per day in Q2 and through the rest of the year. He said grades were below the low end of annual guidance due to higher-than-planned dilution, but are expected to return to guided levels in Q2. In response to analyst questions, Guimond characterized the company’s drill-and-blast review as an ongoing process and said the quarter’s dilution issues were driven by two stopes that underperformed versus typical modeled dilution of 10% to 12%.

Mulatos District production totaled 32,700 ounces, including nearly 27,000 ounces from Yaqui Grande, Guimond said. He said costs were at the low end of annual guidance due to higher-grade stockpiles, but grades are expected to decrease in Q2 and Q3 toward the lower end of guidance, with costs increasing through the rest of the year to align with annual guidance. Guimond said construction of the PDA project is progressing, with earthworks on key surface infrastructure substantially complete and mill foundation work underway. He said PDA remains on budget and on schedule for first production in mid-2027 and is expected to extend the Mulatos mine life by at least nine years based on the PDA deposit alone.

Scott Parsons, senior vice president of corporate development and investor relations, said 2026 exploration programs are underway across the portfolio. He said efforts include testing underground potential at Lynn Lake below the MacLellan and Gordon deposits, continued drilling at Island Gold to extend mineralization laterally and at depth, and follow-up work at Quinn Pick with the “intention of having a resource estimate by the end of 2026.” Parsons also described drilling at Young-Davidson focused on defining hanging wall zones and regional surface targets, and at Mulatos he said drilling is focused on Halcon and Cerro Pelon, where he noted “the 200,000 ounces we’ve defined there by the end of 2025.” He added the company is ramping up for its Kikivik program in Nunavik, northern Quebec, later in Q2.

Capital allocation: dividend increase, hedge buybacks, and potential share repurchases

McCluskey said the company increased its dividend by 60% in February and will continue evaluating shareholder returns. In response to a question about share buybacks, he said Alamos has historically taken an “opportunistic approach” and indicated the company expects to be more active repurchasing shares in Q2 and the remainder of the year.

Fisher also discussed the company’s efforts to eliminate hedges inherited through the 2024 Argonaut Gold acquisition. He said Alamos used $43 million in Q1 to repurchase and eliminate 15,000 ounces of gold forward contracts ahead of maturity, bringing the total eliminated to 245,000 ounces out of the original 330,000 ounces. Fisher said the company will continue monitoring opportunities to eliminate the remaining 85,000 ounces of contracts scheduled across the second half of 2026 and first half of 2027.

Fisher said free cash flow contributed to an increase in cash to $660 million at the end of Q1, and McCluskey said the company had $1.2 billion in available liquidity. He reiterated expectations for higher production and lower costs later in the year, driven largely by the Island Gold District.

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.

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