Canadian miner Alamos Gold has unveiled a new base case life-of-mine (LoM) plan for its Island Gold district operation in Ontario, laying the groundwork for what it expects to become one of the biggest and lowest-cost gold mining operations in the country.

The plan integrates the Island Gold underground and Magino openpit mines into a consolidated, long-life operation centred around the Magino processing plant.

The 20-year plan is based solely on proven and probable reserves from the two deposits and outlines average gold production of 411 000 oz/y from 2026 over the first 12 years of operation, declining to 306 000 oz/y over the full mine life. Mine-site all-in sustaining costs (AISC) are projected at $915/oz during the initial 12 years, falling 19% from the midpoint of 2025 guidance.

“This is a first look at an operation with significant upside potential which we expect to detail in an expansion study later this year,” said Alamos president and CEO John McCluskey. “We expect this to include a larger mineral reserve through ongoing mineral resource conversion, and a potential further expansion up to 20 000 t/d, supporting an even larger, more valuable, and profitable operation.”

The new plan increases reserves and improves operating economics through the use of a centralised, more efficient mill. The company has grown the reserve base for the Island Gold district by 48% to 6.3-million ounces, which includes an 80% increase in underground reserves at Island Gold and a 12% uplift in openpit reserves at Magino.

The plan also reflects the benefits of the Phase 3+ Expansion, currently under construction at Island Gold. The expansion includes the addition of a shaft and paste plant to support increased underground mining rates of 2 400 t/d. Combined with the Magino openpit’s contribution of 10 000 t/d, the district will feed a 12 400 t/d mill from 2027.

Island Gold’s mill will be decommissioned in the third quarter of 2025, with ore from both operations to be processed at Magino’s expanded plant.

Total capital investment for the base case LoM plan is estimated at $2.26-billion, including $453-million in growth capital – most of which will be spent over the next two years – and $1.8-billion in sustaining capital over the mine life. 

The Island Gold district is expected to self-finance the remaining growth capital from operating cash flows at current gold prices, with free cash flow expected to increase from 2026 onwards.

At a base case gold price of $2 400/oz and a USD/CAD exchange rate of 0.75:1, the project delivers an after-tax net present value (NPV) of $4.5-billion at a 5% discount rate. At a gold price of $3 300/oz, that NPV rises to $6.7-billion.

The expansion study, targeted for release in the fourth quarter of 2025, is expected to enhance these figures further. Alamos is considering increasing milling capacity to between 18 000 t/d and 20 000 t/d, supported by a larger mineral reserve base through the conversion of significant measured, indicated and inferred resources.

Island Gold alone hosts 1.0-million ounces in measured and indicated resources grading 10.49 g/t, and 1.3-million ounces in inferred resources grading 16.88 g/t. Magino contributes a further 1.8-million ounces in measured and indicated resources and 1.2-million ounces in inferred resources.

“The base case plan for the Island Gold district outlines an attractive, long-life operation that is expected to become one of Canada’s largest, lowest-cost, and most profitable gold mines,” McCluskey said. “Longer-term, we see excellent opportunities for that value to continue to grow through ongoing exploration success at Island Gold, and a number of emerging higher-grade regional targets that have the potential to support multiple sources of ore within an expanded mill.”

The company noted that the new LoM plan excludes inferred resources, following a review by the Ontario Securities Commission. Prior disclosures included economic analysis that incorporated inferred resources, which is not allowed under Canada’s NationaI Instrument 43-101 regulations. The upcoming technical report will comply fully with these standards.

On the ground, development of the Phase 3+ Expansion has derisked key aspects of the project. Shaft development is currently at 92% of its planned depth, the shaft surface infrastructure is nearly complete, and the paste plant is 71% complete. A new 115 kV power line to supply lower-cost grid electricity is on track for commissioning in mid-2026.

The expansion will also contribute to lowering greenhouse-gas (GHG) emissions. Once complete, the district’s GHG intensity per ounce produced is expected to decrease by 29%, building on already low levels that are currently 57% below the industry average.

In terms of sustainability metrics, the plan estimates average gold recovery at 96.3%, total cash costs of $581/oz for the first 12 years, and mine-site AISC of $1 003/oz over the full mine life. Capital intensity is expected to decrease further with the Expansion Study as a result of scale and infrastructure leverage.

Alamos is confident in its ability to convert more of its extensive resource base into reserves, with Island Gold continuing to post a conversion rate of over 90%. This success is underpinned by definition drilling and detailed geological modelling. The company also revised its classification methodology, allowing for greater confidence in converting indicated resources at wider drill spacing.

The 2025 Base Case Island Gold District Technical Report, which will incorporate these revisions, is set to supersede all prior reports.

With much of the capital already committed and construction milestones tracking toward completion in 2026, Alamos is positioning the Island Gold District not only as a major contributor to its portfolio, but also as a model of low-cost, long-life, and environmentally responsible gold mining in Canada.