Alamos Gold's Island Gold Mine: A New Era of Canadian Gold Production

Alamos Gold is making a significant move to bolster Canadian gold production with the expansion of its Island Gold Mine. This Phase III expansion, coupled with the integration of the Magino mine, is set to transform the operation into one of Canada's largest and most cost-effective gold producers, promising substantial economic benefits for the Algoma region and surrounding communities.

A Golden Future: Island Gold Mine's Transformative Expansion

Alamos Gold's Island Gold Mine, already a highly profitable venture, is undergoing a major Phase III expansion. This ambitious project aims to significantly increase gold production, reduce operational costs, and extend the mine's life. The expansion is also expected to create a substantial economic impact, particularly for the nearby town of Dubreuilville and other communities in the Algoma region.

Key Takeaways

• Increased Production and Lower Costs: The expansion is projected to boost gold production by approximately 70% to an average of 236,000 ounces annually, while simultaneously lowering operating costs.
• Extended Mine Life: The Phase III expansion is expected to more than double the mine's operational life, ensuring long-term economic stability for the region.
• Significant Job Creation: During the construction phase, employment is anticipated to double to 1,200 jobs, with over 600 annual jobs sustained throughout the mine's life.
• Environmental Benefits: The addition of a shaft connected to Ontario's low-carbon intensity grid power will lead to a 35% reduction in greenhouse gas emissions due to decreased diesel consumption.
• Community Impact: Alamos Gold's commitment to local hiring and training programs fosters a skilled workforce and contributes to the economic stability and growth of local communities like Dubreuilville, Wawa, and White River.

Integrated Operations: Island Gold and Magino

The latest Base Case Life of Mine Plan integrates the Island Gold and Magino operations into a single, consolidated entity. This strategic move is designed to leverage the larger and more efficient Magino mill for processing ore from both sites, further enhancing productivity and cost-effectiveness.

Production and Cost Projections

The integrated Island Gold District is poised for impressive performance:

• Average Annual Gold Production: 411,000 ounces starting in 2026 and over the initial 12 years.
• Mine-Site All-in Sustaining Costs (AISC): A low average of $915 per ounce over the initial 12 years (2026+), representing a 19% decrease from 2025 guidance.
• Total Cash Costs: An average of $581 per ounce over the initial 12 years.

Mineral Reserves and Resources

The project benefits from a substantial and growing mineral reserve base:

• Total Mineral Reserves: Increased by 48% to 6.3 million ounces, including:
  • 4.1 million ounces at Island Gold underground (up 80%).
  • 2.2 million ounces at Magino open pit (up 12%).

Capital Investment and Funding

• Growth Capital: $453 million, primarily allocated to completing the Phase 3+ Expansion and the Magino mill expansion.
• Sustaining Capital: $1,808 million over the life of mine.
• Self-Financing Growth: The Island Gold District is expected to self-finance all remaining growth capital at current gold prices, with significant free cash flow growth anticipated after the Phase 3+ Expansion's completion in 2026.

Environmental Stewardship

Alamos Gold is committed to reducing its environmental footprint. The transition to a shaft operation at Island Gold and connecting the Magino mill to the electric grid are projected to decrease the Island Gold District's greenhouse gas emissions intensity by an additional 29%, making it 70% lower than the industry average.

Permitting and Future Upside

The project has secured key permits, with normal course permits required for further expansions. An Expansion Study, expected in late 2025, will detail significant upside potential, including a possible mill expansion to between 18,000 and 20,000 tonnes per day and the conversion of a large portion of existing mineral resources into reserves.

Sources

• Alamos Gold Announces Groundbreaking for Phase III Expansion of Island Gold Mine in Ontario, Canada, Junior Mining Network.
• Alamos Gold Announces Island Gold District Base Case Life of Mine Plan Outlining One of the Largest and
  Lowest-Cost Gold Mines in Canada with Significant Upside, Junior Mining Network.