Alamos Gold said in its third quarter results that commissioning of the Island Gold stage 3+ shaft in northern Ontario will now complete in mid 2027 rather than the first quarter, a delay of about one quarter, and that the project is expected to cost about 5 percent more than its 835 million dollar budget, implying roughly 877 million dollars. About 815 million dollars had been spent by September 30.
The cause is underground ground conditions. While excavating the storage bins for the shaft’s ore and waste handling system, Alamos encountered a dyke that requires additional ground support and reinforcement of the loading pocket. The higher cost also reflects inflation and the added handling system work.
The operating consequence is timing. Underground mining rates are still expected to exceed 2,000 tonnes a day in the first half of 2027, but the step up to 2,400 tonnes a day now lands in the second half. Slower development at Puerto Del Aire in Mexico and constraints at Young Davidson add pressure into 2027, and while formal 2027 guidance was not updated, Desjardins analyst Bryce Adams said the commentary points to a lower production outlook.
The quarter behind the announcement was mixed. Group production fell 16 percent year on year to 119,000 ounces and all in sustaining costs rose 42 percent to 1,956 dollars an ounce, though the Island Gold District itself set production records, and Alamos held revised annual guidance of 510,000 to 560,000 ounces. The long term claim is unchanged: the expanded district is expected to average 534,000 ounces a year over its first decade from 2028 at mine site AISC of 1,025 dollars an ounce.