Alamos Gold Cuts Q2 Guidance by 12% After Seismic Events at Young-Davidson
AGI•Seismic events and a 3-day power outage at Young-Davidson restricted access to higher-grade stopes, prompting a 12% cut in Q2 production guidance to 130,000–135,000 ounces. Island Gold ramped underground mining to a record 1,500 tpd, Magino mill throughput hit 9,800 tpd, retiring 35,000 ounces of forward contracts for $92.3 million.
1. Young-Davidson Operational Disruptions
Two seismic events at an active mining front at Young-Davidson damaged infrastructure and limited access to two higher-grade stopes, while a storm-related power line failure caused three days of unplanned downtime. No injuries occurred, but these issues constrained mining rates and production for the quarter.
2. Revised Production and Cost Guidance
Following the disruptions and lower mined grades, second-quarter production guidance has been reduced to 130,000–135,000 ounces, a 12% decrease from prior levels, and costs are expected to exceed prior forecasts. Consolidated full-year output is now projected below the low end of guidance with higher all-in sustaining costs, with updates due in late July.
3. Island Gold District Ramp-Up
Island Gold continues to exceed targets with underground mining averaging over 1,500 tpd and on track for 2,000 tpd by year-end. Magino mill throughput has climbed to nearly 9,800 tpd in June and is expected to reach 10,000 tpd in Q3, supporting substantial production growth at lower costs.
4. Hedge Eliminations and Share Buyback
The company repurchased and retired 35,000 ounces of forward sale contracts for $92.3 million, eliminating 85% (279,000 ounces) of legacy hedges from Argonaut Gold. In May, 753,600 shares were repurchased for $30 million at an average price of $39.84 under the NCIB, with further buybacks under evaluation.
