Island Gold Sets a Record, and Alamos Gold Makes 119,000 Ounces

Island Gold, the underground mine near Dubreuilville in northern Ontario, had the best quarter in its history this summer. Two other mines owned by Alamos Gold Inc. (TSX: AGI) went the other way.

The company reported on October 28, 2026 that it produced 119,000 ounces of gold in the third quarter. Output was 16 per cent below the same quarter of 2025. The company stated that the quarter was in line with its own quarterly guidance.

The shares fell on the first session after the report. They closed at C$40.26 on the TSX on October 29, 2026, down 9.1 per cent.

The close is per end-of-day data read on TMX Money at 13:58 Pacific on October 29.

About 1.69 million shares traded on the TSX that day, and the 52-week range runs from C$38.03 to C$75.78.

Where the ounces came from

Alamos runs three producing districts, two in Ontario and one in Mexico. The quarter looks very different at each.

The 2025 column is worked back from the percentage changes the company published. It is rounded for that reason.

All-in sustaining cost, or AISC, measures what it costs to produce an ounce and keep the mine running. It adds sustaining capital, overheads and similar items to the direct cash cost.

The Island Gold District includes the Magino open pit next door, which Alamos bought in 2024. Its 68,700 ounces were a quarterly record, the company reported. Underground mining averaged 1,790 tonnes a day, also a record and well above the second quarter.

The grade was a little softer. Underground ore averaged 8.69 grams of gold per tonne, slightly below the second quarter and below guidance. The MD&A blames extra dilution in certain stopes in August. Dilution is waste rock that ends up mixed with the ore.

What happened at Young-Davidson

Young-Davidson, near Matachewan in Ontario, produced 22,700 ounces. The drop from a year earlier was 40 per cent.

The cause was a localized seismic event in the second quarter. A seismic event in an underground mine is a sudden release of stress in the rock. The company is rehabilitating the 9410 level and adding ground support.

The lower output was expected, and Alamos cut its Young-Davidson range in July to 100,000 to 115,000 ounces. John McCluskey, the chief executive, described the quarter as "lower planned production from Young-Davidson" in the release.

Mine-site AISC at Young-Davidson nearly doubled from a year earlier, to US$2,764 an ounce.

The figure is above the mine's revised 2026 AISC guidance of US$2,500 to US$2,600 an ounce, set on July 29, 2026.

The MD&A attributes the higher cost per tonne to lower mining rates and lower grades. The company expects fourth-quarter output there to be similar to the third.

Mulatos is near the end of one pit

The Mulatos District in Sonora, Mexico, produced 27,600 ounces, down 25 per cent. Most of the gold there comes from La Yaqui Grande, an open pit heading toward the end of its life.

Ore was stacked at 5,900 tonnes a day, below guidance, according to the MD&A. It points to the rainy season and fewer areas left to mine. Less gold also came from residual leaching of the older Mulatos heap. Alamos expects higher grades and stacking rates in the fourth quarter.

The next source of ounces in Mexico is PDA, an underground deposit with its own mill. The company says the mill is on track for mid-2027. It also says slower underground development will mean lower PDA output in the second half of 2027.

The cost line and the guidance

Company-wide AISC was US$1,956 an ounce in the quarter. The revised 2026 range, set on July 29, 2026, tops out at US$1,875.

The quarter sat US$81 above that ceiling.

The year so far tells a calmer story. Over nine months AISC averaged US$1,845, inside the range. Alamos expects both cash costs and AISC to fall in the fourth quarter.

Production works out in a similar way. Alamos made 373,500 ounces in the nine months to September 30, 2026. The annual range is 510,000 to 560,000 ounces.

Reaching the bottom of the range needs 136,500 ounces in the fourth quarter. The company's own fourth-quarter outlook is 140,000 to 160,000 ounces.

Add those to the nine-month total and 2026 lands between 513,500 and 533,500 ounces. Both ends sit in the lower half of the guided range. Alamos says it remains on track for its revised guidance.

The shaft moves to mid-2027

The Phase 3+ expansion is the project the whole growth plan leans on. It adds a new shaft at Island Gold to hoist more ore from deeper levels.

Commissioning has slipped about one quarter, to mid-2027. The company says a dyke required extra ground support in the ore and waste handling system. A dyke is a sheet of different rock that cuts through the surrounding formation.

The Phase 3+ expansion, of which the shaft is part, was budgeted at US$835 million. Alamos now expects total project capital to come in about 5 per cent higher. The MD&A cites inflation and additional work on the ore and waste handling system. Spending on the expansion had reached about US$815 million by the end of September.

McCluskey said the delay "has no impact on our longer-term outlook." The company repeated its plan to reach about one million ounces a year by 2030.

The release lays out the next steps. Underground mining is to run above 2,000 tonnes a day in early 2027, rising later that year. The expanded Magino mill, at 20,000 tonnes a day, is expected in the first quarter of 2028.

Lynn Lake in Manitoba is the third project. Its permanent camp is commissioned and plant foundations are under way. First production is expected in the first half of 2029.

Gold price did much of the work

Revenue for the quarter to September 30, 2026 rose 10 per cent to US$510.4 million, on fewer ounces sold. The reason is price. Alamos realized an average of US$4,258 an ounce, the release showed.

Net earnings were US$165.6 million, or US$0.40 a share, in the same period. Free cash flow for the third quarter of 2026 was US$75.6 million, the company reported.

Some of that cash went to a legacy cost. Alamos inherited gold hedges when it bought Argonaut Gold in 2024. It paid US$86.2 million in the third quarter to close out 33,000 ounces of them.

Including 3,000 ounces closed after the quarter, 315,000 of the 329,000 hedged ounces inherited from Argonaut are now retired. That is 96 per cent, the company disclosed.

Cash, debt and the buyback

Alamos held US$597.4 million of cash and equivalents as of September 30, 2026, the MD&A filed on October 28 showed. It had drawn US$200 million on a US$750 million credit facility at that date.

Subtracting the drawn amount from cash leaves roughly US$397 million of net cash at September 30, 2026. The net figure is our own arithmetic.

The balance has grown since quarter end. Alamos received US$160 million on 9 October from the earlier sale of its Turkish assets. A final US$150 million is due in October 2027.

A share buyback is in progress. The company bought back 191,944 shares in the third quarter for US$5.7 million.

It bought 549,757 more after the quarter for US$16.6 million, the release stated. Buybacks in 2026 now total US$72.3 million.

The quarterly dividend is US$0.04 a share, after a 60 per cent increase earlier this year. Dividends and buybacks together come to US$122.5 million for 2026 to date.

A quarter of two stories

The documents make the split easy to follow. The record mine is the one the growth plan depends on, and it is producing more. The weaker mines are the older open pit in Mexico and a mine still repairing seismic damage.

Third-quarter AISC ran above the annual range, which Alamos expects fourth-quarter costs to move back into. The Phase 3+ expansion behind Island Gold's growth now finishes about a quarter later and about 5 per cent over budget.

The company's next dated step is the shaft, due to be commissioned in mid-2027 at Island Gold.