Alamos Gold (TSX: AGI) cut its second quarter production outlook on Thursday after two seismic events struck its Young-Davidson mine last week, damaging infrastructure and locking the company out of higher grade ore it had counted on for the quarter.
One of the events occurred at an active mining front. No one was hurt, but the damage cut access to two higher grade stopes that had been slated for mining in Q2. With its mining sequence under review, the company now expects rates at Young-Davidson to average around 5,000 tonnes per day through the rest of the year.
Optimization work and additional ground support planned for the second half are expected to lift those rates beyond 2026.
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The underground issues follow storm damage in late May that knocked out a regional power line. The line’s remote location slowed the utility’s response, resulting in three days of unplanned downtime that weighed on production.
Taken together, the seismic events, the power loss and lower grades mined, the disruptions pushed Alamos to revise second quarter production guidance to between 130,000 and 135,000 ounces. That marks a 12% cut from previous guidance at the midpoint, and also reflects the timing of recovered ounces at La Yaqui Grande. Costs are expected to run higher than earlier guided alongside those cuts.
The damage is also expected to extend to the full year. Alamos now expects consolidated 2026 production to land below the bottom of its guidance range, with costs above target. Revised annual figures are expected to be released with second quarter results in late July.
Separately, Alamos indicated that they spent $92.3 million during the quarter to retire 35,000 ounces of legacy gold forward contracts inherited from Argonaut Gold, clearing the last of its 2026 hedges and lifting its total retired position to 85% of the original book. The company also repurchased $30 million of stock in May at $39.84 per share, and signalled more buybacks ahead.
Alamos Gold last traded at $51.40 on the TSX.
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