Alamos Gold closed the second quarter of 2026 with a record 67,500 ounces from the Island Gold District and $594.1 million in revenue, a 36% increase year-over-year, even as a June seismic event at Young-Davidson forced the company to lower full-year production guidance to 510,000-560,000 ounces from the prior 570,000-650,000 range. Management used the same print, dated July 29, 2026, to retire the final 35,000 ounces of legacy Argonaut forward-sale hedges for $92.3 million in cash, eliminating 85% of the 329,000-ounce overhang inherited from the 2024 acquisition, and to fund $50 million of share repurchases at an average price of $35.70.
The thesis is that Alamos is roughly twelve months from a step-change in unit economics. The Phase 3+ shaft at Island Gold has finished sinking to its 1,381-metre design depth, and shaft equipping is on track for first-quarter 2027 commissioning, which lifts underground mining rates from the current 1,550 tonnes per day to 2,400 tonnes per day; the Magino mill expansion to 20,000 tonnes per day follows in the first quarter of 2028, and the IGD Expansion Study, released February 3, 2026, projects 534,000 ounces per year from Island Gold alone for the first ten years at $1,025 mine-site all-in sustaining costs. Our read is that the seismic event and the resulting cost revision mark the trough of the cost cycle, and that the equity re-rates as quarterly AISC, the all-in sustaining cost measure that captures mining, processing, royalties, sustaining capital, and corporate overhead per ounce, trends back toward the $1,400s in 2027 from the $1,728 reported this quarter.
The single load-bearing risk is execution. Total capex guidance, including capitalized exploration, is $945-1,035 million in 2026, the heaviest year of the multi-year build, and the seismic event underscores that operating risk is concentrated at the underground mines. The next data point that tests the thesis is the third-quarter 2026 production print, expected at 115,000-140,000 ounces, which will confirm whether Young-Davidson's revised 5,000 tonnes-per-day mining rate holds in the second half and whether Island Gold's grade and tonnage ramp continue as planned.